And now, a watchdog agency called the State Contracting Standards Board (SCSB) has launched an inquiry into issues raised by the auditors — including whether state laws should be changed so that, in the future, penalties can be imposed on officials and agencies that do what the CRDA did.

In light of the above, it seems that the hint of irregularities and improprieties is always going to dog efforts to revitalize the city-owned stadium that has a scandal-plagued history.

The current legal issues surrounding the mostly-state-funded, $14 million renovation project aren’t as grave as those that resulted in fraud convictions and prison sentences for the two men previously selected to redevelop Dillon in recent years. But they’re serious enough to raise the question of why even a relatively successful (so far) restoration has to be so messy.

“The CRDA paid without having a contract. So why is that not illegal?” SCSB member Jean Morningstar asked at a meeting Aug. 9 in which state auditors explained why they faulted the quasi-public state development agency.

“If I go ahead and pay money for something that I don’t have permission to pay money for, out of an account that I don’t own, how can that not be illegal — and what, exactly, is going to happen to the entity that did that?” Morningstar said, adding: “I’m outraged by that, personally.”

State Auditor John Geragosian and members of his staff responded that state contracting statutes don’t contain provisions to penalize officials of state departments and quasi-public agencies who circumvent official restrictions that are put in place to protect taxpayer funds.

“Our office has no enforcement power,” Geragosian said. “We report to the General Assembly what we found, and those are the policymakers who can make the changes” if they decide penalties are necessary.

The contracting standards board decided not to wait for the legislature to figure all of this out by itself. It has formed a four-member working group to look into details of the Dillon expenditures and recommend ways of ensuring there’s no repeat of such conduct, including potentially requesting legislation establishing penalties for such violations of procedure.

SCSB Chairman Lawrence Fox and the board’s executive director, David Guay, wrote Aug. 16 to Melissa McCaw, budget chief for Gov. Ned Lamont, asking for information, including “all communications and accompanying material related to the request and release of bond funds for the renovation of Dillon Stadium.”

On the same day, they sent a separate letter to CRDA Executive Director Michael Freimuth, with detailed requests for information such as “all material and communications related to the solicitation, selection and award of contracts to Newfield Construction and JCJ Architecture for work at Dillon Stadium.”

Both letters asked that the materials be delivered by Aug. 30.

Money spent, but conditions not met

What got this started was the Aug. 2 state auditors’ report that said the CRDA spent $4,039,356 on stadium construction between July 20, 2018, and Feb. 24, 2019, without a formal agreement in place between Hartford and a professional sports team. The project funds were approved by the State Bond Commission subject to various approvals, including a deal being signed and formalized between the city and a professional sports franchise.

In this case, the sports franchise was for the minor league Hartford Athletic soccer team, owned by the Mandell-led HSG partnership — and it took until Feb. 25 of this year for that deal to be signed and formalized between HSG and the city.

The delay in signing the agreement was caused by the State Election Enforcement Commission’s lengthy investigation of Mandell’s illegal campaign contributions. And so it can be said that one irregularity bred another.

“The [CRDA] did not comply with the State Bond Commission and its [own] board of directors’ requirement that an executed agreement be in place prior to spending bond funds,” the audit report stated. “It appears that the agreement between the City of Hartford and the professional sports team (Hartford Athletic) was delayed while contractual details were being worked out. Management moved forward with the project without an executed agreement in place.”

CRDA officials did not deny the funds were improperly spent, but they still said the auditors’ “criticism omits any acknowledgement of all the factors in play at the time” including: the urgency in getting the project done in time for the soccer franchise to begin play at Dillon Stadium; and the fact that two State Bond Commission members, then-state budget director Ben Barnes and economic development Commissioner Catherine Smith, were members of the CRDA board, knew what was going on and gave it their informal OK to spend the $4 million.

The CRDA’s deputy director and general counsel, Anthony Lazzaro, made that argument at the Aug. 9 SCSB meeting at which the auditors discussed their findings. Lazzaro said: “While ... we agree with the auditors that this was not the way to proceed, and we will not do this again, we did think there was enough information going to the ... bond commission and our [CRDA] board and enough agreements in place — some only verbal, I agree — that it warranted proceeding forward.”

Noting that she is a top official in the Connecticut American Federation of Teachers union, Morningstar added: “And as a representative of 2,800 members in a bargaining unit, if they acted the way that you all acted, they would be unemployed today. And I’m sorry to have to say that, but ... with $4 million of state money at risk, I think you were wrong.”

CRDA chair Suzanne Hopgood was not as penitent-sounding in her defense to the auditors’ criticism, saying: “Deliberative and exhausting analysis and risk assessment by management was reviewed and supported by the board of directors last summer in order to keep the Dillon Stadium project on schedule.” She added: “You can’t establish quasi-public agencies to run government ‘like a business’ and then admonish them for making those same decisions in a businesslike way.”

On Thursday, Senate Republican leader Len Fasano kept up what’s been a steady stream of criticism that quasi-public agencies are out of control, calling on Lamont to pull back plans for creation of two additional special-purpose quasi-public agencies “until Connecticut adopts reforms to increase transparency and oversight of the entire quasi-public system.”

In a letter to the governor, Fasano said: “It is not wise to create any brand new quasi-public agency before the state has developed a plan to resolve the issues rampant throughout our already existing quasi-publics.” He said he was referring to “two new quasi-publics approved by Democrats this year: the Paid Family Medical Leave Authority and the Connecticut Municipal Redevelopment Authority.”

He added: “If we allow new quasi-publics to be formed before we resolve the current systemic issues, we will only be setting them up for failure. It’s akin to finding out a house’s structural design has a defect, but instead of halting construction on any more new homes while you fix the problem, you continue building brand new homes with the defective design still in place.”

Jon Lender is a reporter on The Courant’s investigative desk, with a focus on government and politics. Contact him at jlender@courant.com. The original story can be found here.